Why debt consolidation loans don't work. If you already have a lot of debt, getting a new loan may be difficult. Nobody wants to give you a loan if you are already in trouble. Often these debt consolidation loans will have you end up with a higher interest rate than you were already paying. Carrying a lot of debt will usually result in lowering your credit scores. Your credit score is a major factor in what type of interest rate you will get. You would be better off trying to see if you can get your credit card company to lower your rates than to go with a debt consolidation loan. You may also want to consider a debt management program as an option if you can't get anywhere with your credit card companies. Once you join a consumer credit counseling program, the creditors have to lower your interest rates.
The best bet is to just not get into debt. Once you are in debt there just aren't that many good options.
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If you have decided that you want to consolidate your debts, the choices you will face could quickly get stressful and overwhelming. Given the risks of losing your home and amassing debt, it's wise to proceed with caution.
Debt consolidation involves tackling one major issue at a time. If you attempt to service all of your debt simultaneously with a limited amount of funds, you could stretch yourself too thin, leaving you without enough money to buy month-to-month essentials.
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